14 May 2008 17:35 [Source: ICIS news]
TORONTO (ICIS news)--UralChem's full-year operating income for 2007 more than tripled to $144m (€94m) on strong revenue growth, favourable natural gas costs, improved pricing and its focus on higher-margin products, the Russian fertilizer producer said on Wednesday.
Revenues for the 12 months ended 31 December increased by 51% to $700m and net profits more than doubled to $91m, compared with 2006.
The earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 30% in 2007, compared with 19% in 2006.
UralChem was confident of maintaining high margins going forward due to its focus on high-margin products and favourable natural gas costs and notwithstanding the temporary duties on fertilizer exports imposed by ?xml:namespace>
Last year, natural gas accounted for 36% of the company’s overall cost of goods sold, the largest single costs item, and would remain a significant cost item, he said.
However, UralChem’s natural gas costs were $1.6/m British thermal units (Btu) in 2007 - much lower than that of its international competitors - and were expected to remain very favourable due to its natural gas contracts with suppliers Gazprom and Novatek, Osipov said.
While gas prices would rise globally as well as in Russia - where the government introduced legislation to raise domestic gas prices to bring them in line with international prices - UralChem, for its part, had locked in favourable contracts over five years, he said.
Through 2010, the company expected to buy less than 2% of its gas feedstock requirements on the open market, he added.
UralChem remained focused on higher-margin fertilizer products with 48% of its exports last year going to western and central
The company was not planning to increase its presence in
This year, UralChem would reduce its workforce by 5%, from 10,500 at the end of 2007, he added.
($1 = €0.65)
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